Dollar is catching a modest bid following the dramatic decline

The US Dollar Index (DXY), which measures the value of the greenback against a basket of weighted currencies, was catching a modest bid Thursday morning following a sharp retreat. After significant declines over recent trading sessions, the DXY has staged a modest rebound from a multi-week low, with the 100-day moving average providing additional support beneath the price action. As of this writing, the index is trading just above 99.00, signaling a promising bullish recovery after recently dipping toward the 98.50 support area.

A busy macro-NY session ahead

Another intense New York session is expected, with market participants focused on the critical US February PCE Price Index release later in the day. This report could influence the Federal Reserve’s policy direction. The Core PCE Price Index, which excludes volatile food and energy prices, offers a clearer view of underlying inflation trends. This data is significant because the Federal Reserve uses PCE inflation as a key gauge to guide its 2% inflation target. Investors will also be looking at other economic data, such as the US GDP and jobless claims numbers.

Dollar Index (DXY) Technical Outlook

From a technical perspective, strengthening RSI and MACD indicators suggest short-term bullish sentiment. However, traders should look for confirmation through price action and volume. Key support for the USD is expected around the 98.60–98.40 area, which held earlier this week and could attract significant market interest.

On the daily timeframe, the DXY recently bounced off support at the 100-day simple moving average (SMA), indicating a possible continuation of the rebound to close the huge gap. If the bulls regain the momentum, the next critical resistance is likely near 99.50–99.60. Despite this short-term recovery, the 100.00 level remains the key resistance zone to watch. As long as prices stay below this level, the overall mixed trend will persist, even if oversold conditions trigger a bounce or some bullish price action at lower levels.

In summary, despite the early rebound, traders should remain cautious. They should seek clear bullish signals before entering long positions and wait for bearish confirmations before considering countertrend scalps.

 

Warning! This material is not intended as investment advice. Past performance data does not guarantee future returns. Investing in foreign currencies may affect your returns due to their fluctuations. Any transaction in securities may result in both profits and losses. The assumptions and expectations set forth in this material are only estimates that may not be accurate and may change depending on current economic conditions. These statements do not guarantee future returns.